London Whale - All posts tagged London Whale

Tuesday\’s banking roundup: More lawsuits against banks, this time in foreign exchange; the FBI looks at high-frequency trading; and the new job of one major corporate executive is that of owning a night club.

The trader last week filed a claim against the Financial Conduct Authority, which is the U.K. financial regulator. It\’s not clear exactly what his claim might be. As Bloomberg News points out, the FCA did fine J.P. Morgan Chase & Co.
over the $6.2 billion trading loss, but its report didn\’t mention Martin-Artajo by name. The FCA’s website merely says that he has filed a claim, and that a hearing has not been set. His lawyer, Bill Leone, didn’t immediately return a call for comment.

Here\’s one of the most interesting provisions of the Volcker Rule: It seeks to hold accountable the people at the top — and by that, we mean the very top.

The rule released Tuesday contains a \”CEO attestation\” provision, which will require chief executives at the big banks to confirm, annually and in writing, that their bank is in compliance with Volcker.

Ed Mills at FBR Capital Markets drew connections between the provision and the Enron and WorldCom scandals, “when so many members of Congress were frustrated with CEOs and CFOs (who) had the ability to plead ignorance.”

Preet Bharara relishes his reputation as the tough sheriff of banktown. But even a hard-charging sheriff can be tethered by cash constraints.

Bharara, who has been the Justice Department\’s top attorney in Manhattan and the surrounding area for more than four years, said Friday that if his office continues to be underfunded, it will be good news for criminals.

\”I have been under a hiring freeze for a long period of time and that is projected to go on indefinitely,\” said Bharara, whose formal title is U.S. attorney for the Southern District of New York. \”…People are going to start getting away with bad conduct. Victims are not going to be able to be vindicated. … In my mind, it’s something of a tragedy.”

One commissioner of the Commodity Futures Trading Commissioner voted against the J.P. Morgan Chase & Co. $100 million settlement, but not because the fine was too big.

The nation’s biggest bank by assets will pay $100 million and admit to reckless conduct on charges related to the “London Whale” trading scandal, said the commission in a statement on Wednesday. The scandal led to losses of more than $6 billion for the firm and multiple investigations by regulators.

Jamie Dimon has no plans to head up another major bank after being the chairman and CEO of J.P. Morgan Chase & Co.

That\’s what Dimon told the audience at the Financial Women’s Association event last Tuesday during a “fireside” chat, when asked about his future, according to sources at the event.

The CEO was casual, relaxed and jocular at the off-the-record event that drew approximately 300 people to J.P. Morgan’s 50th floor offices on Park Avenue in Manhattan.

Dimon responded to a question from the audience asking him what was next for the CEO. He said he loved the company he worked for and loved his job but didn’t see himself tackling another big job after being head of the biggest U.S. bank by assets.

J.P. Morgan Chase & Co. will pay one of the biggest fines incurred by an individual firm on Wall Street since the financial crisis. The company was fined $920 million Thursday for misconduct related to the \”London Whale\” scandal.

Here\’s a look at some other notable large Wall Street fines in the wake of the financial crisis:

J.P. Morgan was downgraded to a hold from a buy and the price target was cut to $57 a share from $60, by long-time bank analyst Richard Bove, at Rafferty Capital, citing increased government regulation hurting the bank’s performance.

Reuters

“I see three clear risks to company earnings as a consequence of the government vendetta,” said Bove in the report. “The first is investment banking, particularly overseas. The second is payment systems. The third is litigation costs.”

The first two are likely to decline while the third is expected to increase, added Bove.

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